Activision Boasts $1 Billion 'Call of Duty: Ghosts' Day One Sales

The battle for bragging rights at video games' top table continues, with the announcement by
Activision Blizzard (NASDAQ:ATVI) that sales of Activision's latest first-person shooter, Call of Duty: Ghosts, exceeded $1 billion on its first day.

This number, and this announcement, is clearly intended to reference and invite comparison with the $800 million launch number for Take-Two Interactive's Grand Theft Auto V, and the billion dollars its sales figures reached within three days of release. However, the two are not meaningfully comparable.

The figure of $800 million for Grand Theft Auto V was for retail sell-through, rather than sell-in - that is, around 15 million people purchased a copy of Grand Theft Auto V to play.

The $1 billion for Call of Duty: Ghosts reflects sell-in - that is, the number of copies of Call of Duty: Ghosts shipped to retailers. Put another way, retailers expect that this number of copies will provide them with a sensible balance of risk between overstock and running out of copies in individual stores.

The total sell-through for Grand Theft Auto V has not been broken out, but Take-Two Interactive CEO Strauss Zelnick said at Take-Two's last earnings call that sell-in was at 29 million - considerably more than a billion dollars' worth of inventory.

For accounting purposes, once a copy of a game is sold, it is sold - the retailer is then generally at liberty to dispose of it as it wishes - so, that $1 billion of retail stock will be sold at varying price points over time. In certain exceptional cases the publisher may offer retailers financial incentives to discount stock, but this "price protection" is considered in business and accounting terms extraordinary (a recent outbreak at Square Enix was one of the reasons for President Yoichi Wada's departure earlier this year).

It is also worth noting that the $1 billion figure from Activision reflects not only copies of the game for Xbox 360 and PlayStation 3, for which Grand Theft Auto V has so far been released, but also retail copies for Windows PC and Wii U, and copies for next-gen consoles that will already be in the retail pipeline, even if the average gamer does not yet own the hardware to play them on.

Apples and shooty, shooty oranges

Sales to next-gen platforms will be particularly interesting, in light of the ongoing controversy around the 720p resolution of the Xbox One edition and reports of frame-rate issues on the PS4 version (which may of course be patchable by the time the average gamer gets his or her hands on it). Notwithstanding the froth to which a scandal-hungry games media and overwrought platform enthusiasts has beaten these questions, they will have some effect on sales, or at least on sell-through, for both platforms.

Nonetheless, asking "are these figures as impressive as those for Grand Theft Auto V" is not unlike asking "is this mountain as big as
Olympus Mons?" The answer is going to be no, but the details are important. Call of Duty: Ghosts was produced in far less time than Grand Theft Auto V, and at a lower cost. Buyers of Grand Theft Auto V had been waiting for a new GTA game for five years; Call of Duty games have a strict annual cycle.

In all, this statistic does what Activision needs it to - show confidence in its highest-earning retail franchise, and give them an injection of momentum as they go into their Q3 earnings call. At the time of writing, shares in Activision Blizzard were up 0.5%, at $16.62.